Question & Answer

Elastomers and thermosetting polymers are both cross-linked. Why are their properties so different?

Describe the roles of market makers. (LO2)

Why is it desirable to use energy sources for welding that have high heat densities?

Tom was just hired by Acme Corporation and has decided to purchase disability insurance.  This insurance promises to pay him weekly benefits to replace his salary should he be unable to work because of disability.  Disability insurance is also available through Acme as part of its compensation plan.  Acme pays these premiums as a nontaxable fringe benefit, but the plan promises to pay about 10 percent less in benefits.  If Tom elects to have Acme pay the premiums, then his compensation will be reduced by an equivalent amount.  Should tax considerations play a role in Tom’s choice to buy disability insurance through Acme or on his own?  Explain.

What is graphite?

Your friend just told you about a penny stock that they purchased, which increased in price from $0.10 to $0.50 per share. You start investigating penny stocks, and after conducting a large amount of research, you find a stock with a quoted price of $0.05. Upon further investigation, you notice that the ask price for the stock is $0.08 and that the bid price is $0.01. Discuss the possible reasons for this wide bid–ask spread. (LO2)

A sheet-metal part 3.0 mm thick and 20.0 mm long is bent to an included angle = 60° and a bend radius = 7.5 mm in a V-die. The metal has a yield strength = 220 MPa and a tensile strength = 340 MPa. Compute the required force to bend the part, given that the die opening dimension = 15 mm.

What are the primary characteristics of an annuity?Differentiate between an “ordinary annuity” and an “annuity due.”

What are some of the simple measures used to assess the feasibility of a proposed cup-drawing operation?

How do different cost structures affect the breakeven point and operating leverage?

An end milling operation is carried out along a straight line path that is 325 mm long. The cut is in a direction parallel to the x-axis on an NC machining center. Cutting speed = 30 m/min and chip load = 0.06 mm. The end milling cutter has two teeth and its diameter = 16.0 mm. The x-axis uses a DC servomotor connected directly to a leadscrew whose pitch = 6.0 mm. The feedback sensing device is an optical encoder that emits 400 pulses per revolution. Determine (a) feed rate and time to complete the cut, and (b) rotational speed of the motor and the pulse rate of the encoder at the feed rate indicated.

Collinsworth Co. reported sales on an accrual basis of $100,000. If accounts receivable increased $30,000 and the allowance for doubtful accounts increased $9,000 after a write-off of $2,000, compute cash sales.

What is accomplished when a bank integrates its liability management with its asset management? (LO1)

How are FASB preliminary views and FASB exposuredrafts related to FASB “statements”?

61. Joaquin is a 30 percent partner in the SBD Partnership, a calendar-year-end entity. As of the end of this year, Joaquin has an outside basis in his interest in SBD of $188,000, which includes his share of the $60,000 of partnership liabilities. On December 31, SBD makes a proportionate distribution of the following assets to Joaquin: Tax BasisFMV Cash $ 40,000 $40,000 Inventory 55,000 65,000 Land 30,000 45,000 Totals $ 125,000 $150,000 a. What are the tax consequences (amount and character of recognized gain or loss, basis in distributed assets) of the distribution to Joaquin if the distribution is an operating distribution? b. What are the tax consequences (amount and character of recognized gain or loss, basis in distributed assets) of the distribution to Joaquin if the distribution is a liquidating distribution? c. Compare and contrast the results from parts (a) and (b).

Is the LIFO recapture tax a C corporation tax or an S corporation tax?  Explain.

Green Day Hardware Company’s payroll for November 2014 is summarized below. Amount Subject to Payroll Taxes Unemployment Tax Payroll Wages Due FICA Federal State Factory $120,000 $120,000 $40,000 $40,000 Sales 32,000 32,000 4,000 4,000 Administrative 36,000 36,000 — — Total $188,000 $188,000 $44,000 $44,000 At this point in the year, some employees have already received wages in excess of those to which payroll taxes apply. Assume that the state unemployment tax is 2.5%. The FICA rate is 7.65% on an employee’s wages to $113,700 and 1.45% in excess of $113,700. Of the $188,000 wages subject to FICA tax, $20,000 of the sales wages is in excess of $113,700. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,000 for factory, $7,000 for sales, and $6,000 for administrative. Instructions (a) Prepare a schedule showing the employer’s total cost of wages for November by function. (Round allcomputations to nearest dollar.) (b) Prepare the journal entries to record the factory, sales, and administrative payrolls including the employer’s payroll taxes.

What is the tax base for the Social Security and Medicare taxes for an employee or employer?  What is the tax base for Social Security and Medicare taxes for a self-employed individual?  Is the self-employment tax in addition to or in lieu of federal income tax?

Why does exchange rate overshooting occur? What determines its magnitude?

Fontenot Corporation sold some machinery to its majority owner Gray (an individual who owns 60 percent of Fontenot). Fontenot purchased the machinery for $100,000 and has claimed a total of $40,000 of depreciation expense deductions against the property. Gray will provide Fontenot with $10,000 of cash today and a $100,000 note that will pay Fontenot $50,000 one year from now and $50,000 two years from now.  a. What gain or loss does Fontenot realize on the sale? b. What are the amount and character of the gain or loss that Fontenot must recognize in the year of sale (if any) and each of the two subsequent years? (Hint: Use the Internal Revenue Code and start with §453; please give appropriate citations.)

Explain how bond prices may be affected by money supply growth, oil prices, and economic growth. (LO2)

Discuss the liquidity risk experienced by life insurance companies and by property and casualty (PC) insurance companies. (LO5)

For what types of parts are VTLs (vertical turret lathes) used?

Illiad Inc. has decided to raise additional capital by issuing $170,000 face value of bonds with a coupon rate of 10%. In discussions with investment bankers, it was determined that to help the sale of the bonds, detachable stock warrants should be issued at the rate of  ne warrant for each $100 bond sold. The value of the bonds without the warrants is considered to be $136,000, and the value of the warrants in the market is $24,000. The bonds sold in the market at issuance for $152,000. Instructions (a) What entry should be made at the time of the issuance of the bonds and warrants? (b) If the warrants were nondetachable, would the entries be different? Discuss.

Under the percentage-of-completion method, how are the Construction in Process and the Billings on Construction in Process accounts reported in the balance sheet?